The Association Myth

[somarco]

I have never seen a health policy that staes "You cannot be cancelled for any reason or singled out for a rate increase."

That was a not so subtle reference to a sales pitch used by certain organizations who claim THEIR policy is different and you cannot be cancelled for any reason.

Obviously, if someone commits fraud or fails to pay their premium all bets are off.

Here in GA BX used to market small group plans "through" some of the Chambers. Show your chamber membership card and get a 2% discount off the rates. I believe that program was disbanded.

That is not the same thing of course. These are the same plans anyone else can get, just at a slightly different rate.

Or so we were told . . .

 

[somarco]

Associated-based carriers do not need prior rate increase approval, can close out blocks of business, and pool unhealthy blocks of business and slam it with a rate increase. The state can't do a damned thing about it.

And this is different from non-association business in what way?

Guess you haven't seen what Blue is doing to their individual clients the last 3 years. Every year, 30%+ rate increases.

Compare with KP at (usually) single digit increases. Most of the other carriers (Time, GR, World, Humana) are in the 15 - 20% range.

You probably forgot that MoO pulled out of every state virtually without warning 2 - 3 years ago. Marlin Perkins must have rolled over in his khaki grave. Left a lot of folks high & dry.

Oh yeah. Not an association plan.

Carriers filed in that state need prior approval for rates increases

Maybe so in MD, not here.

The entire point of association-based policies is those policies cannot be "double regulated."

Really?

How so?

Again, that statement, at least on the surface, is not applicable here and I don't think it would apply in any other state either. Otherwise all carriers would use associations to issue coverage, file in liberal states (like TX) and to Hell with the rest of the states.

You are shooting blanks fella.

 

[arnguy]

Oh boy, somarco, I am glad I never ran into that sales pitch. BTW the Chambers of Commerce in this area do offer health insurance, but I do not believe the rates are discounted. I did at one time write business for a company called United Chambers which specialized in writing through chambers, however, Provident took them over and closed down the business.

 

[BKrocko]

Please allow me to state the obvious... When I think about association plans, the first one that comes to mind is the NASE. We have all involved ourselves in endless debate of the pro's and con's of this organization as well as the "affordable insurance coverage" that their "enrollers" can guide you to. I personally get a nauseating feeling when I think of them, therefore, the thought of association plans starts out negative in my mind.

On the other hand, Golden Rule also has an association plan. The quality of the companies behind the "association" are worlds apart in this case. The SBA (Small Business Association) offers a great 5K accident plan in CO for $25/mth/family, but once again, it means having to join the association.

I think the thing that none of us like - is having to explain the association (dues) to the client. They want to purchase insurance, not join an association. I do not want to address any issues of how much they can save on office furniture or what type of discounts they can expect to recieve at specific stores.

 

[somarco]

Originally known as the UCIT (United Chambers Insurance Trust), this was a self funded trust reinsured by a sub of Chubb and administered somewhere in OH, IN, can't recall exactly where. I worked with the TN GA peddling that plan to CofC's around the state. We did quite well as did our counterpart in GA.

Later went fully insured by (I believe) Travelers, then eventually went belly up.

Great idea. Great plan. Would have still been around if a couple of *** commissioners didn't get cold feet over the MEWA problems of the late 70's, early 80's.

It was rock solid up until the time it had to convert to fully insured.

 

[arnguy]

I have had people in association plans that are legitimate-----particularly the one I use for BX. The dues are minimal and they do provide extra perks, but that is required for them to meet the state guidlines that you can form an association for the sole purpose of selling insurance. Have had clients in them for years without complaint and they do a good job of administering the accounts.

 

[somarco]

NASE is just one of the ones, and yes, they have abused it. Carriers that use (or have used) the association as a way of writing coverage include GR, Time (back when they were known as Fortis), CGI, World, U S Life and probably a few others.

And yes, you are right. Nothing wrong with it and yes, I do hate explaining that you are signing the application as a member, not an applicant.

But if you want to pay 20% more to this other carrier that does not require you to join an association, I represent them too.

 

[J.R.]

So what are the pros/cons of joining an association? It seems that the answers lies in how each state regulates insurance and the individual carriers plan of attack. Personally, I wonder how some carriers can make a profit by abiding to the plethora of state mandates.

 

[somarco]

The key is, it really doesn't matter if a plan is issued thru association membership or not. You have to look at the value of the policy and match it to your clients needs.

I write business with World through an association. Not much, maybe 1 - 2 policies a month in a good month. They kick butt in some parts of the state while in others they are middle of the road to high. Their proprietary plans (through AHU) are great if you like copay plans (which I dont). Their street plans are pretty good if you can sell a plan without copays and rate ups (sometimes a rider).

World gives outstanding service and their underwriting is reasonable (most of the time).

More often than not I will use GR, KP or Time here in Atlanta. Outside of Atlanta I use World, BX, Time, GR and just starting to look at Consumers (Medical Mutual).

There are also times when I need a carrier like Aetna.

Everything I do is based on VALUE, not price. If I could, I would place all my business with KP but it just isnt possible.

That is why I have other carriers and spread the business around like a true broker.

 

[K-Dub]

I have some clients right now on an association plan who just got their rate increases....8%, 9%. Sure beats the others who got 30%.

It's just the facts!